It may seem weird, but I’ve been eagerly awaiting the day when I see ads in my viral video. eMarketer expects online video advertising to nearly double in 2008 to $1.3 billion, but no one’s really nailed a scalable ad platform for video. However, Google’s been quietly testing their own system and there are a bunch of other startups tackling it as well.
There are a couple key issues they’re all struggling with as they try and generate the greatest amount of ad revenue. There’s still some uncertainty about where to put the ads (pre/post/interstitial?). Even the type or length of the ad is up for debate. A recent study found longer ads were more effective at branding, while conventional wisdom has cast doubt on users sitting through the longer plugs.
After deciding on the format, determining the content of the video in order to generate relevant ads is yet another tough problem. It’s also a dire matter for big brands that don’t want to risk being associated with inflammatory content. Finally, these ad platforms will need publishers, advertisers and a marketplace to trade in.
Here’s a look at what people are doing in video advertising:
Definitely the team to watch, YouTube is treading carefully, experimenting with text ads running along the bottom of the video that users can click on for a full video ad. They’re going to be testing the system with some of their top content producers and word on the street is that the terms are pretty good.
Revver splits ad revenue 50/50 with publishers. They run ads at the end of viral videos, which might mean that people are still paying close attention after watching the main content. However, this also means they lose some precious real estate to help drive traffic to other videos on their network like YouTube does. Revver filters the content themselves, tying in the appropriate ads.
Similar to Revver, VideoEgg helps publishers deliver and monetize their video inventory. It’s a very hands on approach suitable for larger brands that have tight control over the quality and context of their content. They serve up over 20 million videos daily across their EggNetwork. Ads show up alongside lead ins to other videos as well.
ScanScout’s technology scans each video and determines content, with ads delivered contextually to match each scene. They run text ads along the bottom of the videos based on context derived from audio analysis and user behavior.
They’re like adsense for video, tying contextual text ads based on the content of a video. It looks similar to what YouTube is aiming for. When videos play, Adap.tv digs up relevant Amazon products and Looksmart ads to populate an ad bar on the bottom of the video at key moments. They use tags and other meta data, as well as speech to text translations to find out what the video is about.
AdBrite was one of the first to overlay ads on videos with their InVideo platform. Adbrite has created an embeddable video player similar to YouTube. If we choose to show a video on TechCrunch, we can use this embeddable player, and at our option it will include Adbrite ads and our logo as a watermark. Anyone who takes the content and embeds it on their own site will show the same video, with the same ads and watermark. And all click backs on the video go to the original site.
The most interesting ad play, BroadRamp wants to make everything you see on your video a possible point of sale. See a t-shirt you like? Just click the video to buy it now. Tagging or programmatically generating the links to products from the video may not scale or prove too difficult. Their core business is still video content delivery systems, however.
Formerly Podzinger, Everzing searches audio and video. Since they don’t own the content they can’t insert ads on the video content, but their speech-to-text transcription means they can help solve the problem of finding out the subject of a video.
A video search engine like Everyzing, Blinkx analyzes videos speech and meta data to tease out the content of the video. They also claim to use visual recognition as well. However, Blinkx has also leveraged their technology to launch adHoc, contextual advertising based on the content of the video.
Another video search engine currently running in private beta, Cast.TV looks at a video’s meta data and surrounding links to determine more context around the video. We’ve been impressed with how well it works. They haven’t discussed plans to incorporate advertising, however.
Coming up with a kick ass, scalable ad platform solution for social video that satisfies the needs of publishers, advertisers, and viewers is only a piece of the problem. While finding the most effective format will take a lot of testing until consumers reveal the most effective methods, the platforms will also need video content to monetize. Since well defined video properties with targeted content can work with sponsors on established video ad networks, the ideal market for these platforms remains effectively monetizing the jumble of amateur viral video floating around on social networks and YouTube. However, YouTube, which currently owns the lion’s share of video on the net, seems to be taking their time developing the solution in house.
That leaves becoming a destination, partnerships, or acquisition as possible outs. Video search sites like Blinkx and Everyzing are currently monetizing their search pages, but can’t take full advantage of their platforms by embedding ads into the content they link to. While these sites offer deeper video search, existing as a destination site is also a tough path that goes up against established web properties like Google, Yahoo, and AOL. In a slightly different way of going it alone, AdBrite has been going directly to publishers with their InVideo player. Adap.tv has been testing out partnerships, trying their platform out on MetaCafe.
As with most ad platforms, advertisers and publishers will be trying them out for effectiveness. In the end, the startups that can deliver the most return to these two will win out.
The most important thing before ads is measurement. Advertisers and media buyers need to understand how video is being used and measured
I’ve a list of companies that are measuring in this space, and will add to it over time
http://www.web-strategist.com/.....ine-video/
Jeremiah- that’s fascinating, never looked at it from that angle
Do also checkout http://www.liverail.com - we just opened its beta this morning. We’re just getting started, so haven’t yet quite got the momentum of players like YouTube/Revver, but I think we have a very compelling solution for providing relevent video-advertising online and we’re very optimistic about the future of the service.
If any Techcrunch readers would like an invitation to try out our beta, do just leave a note in the comments and we’ll get back to you…
I don’t mind ads in videos, as long as they’re 15 seconds or shorter, and don’t play for EVERY video - otherwise it does get a bit irritating. Basically, like what gamevideos.com does. You just see ads sometimes before your video plays, and they’re always short.
I suspect Yahoo and Microsoft are also working on initiatives for ad delivery..
There is also another type of advertisement that has not been discussed in this article : product placement. I believe that, if executed well, product placement is the ad type that would be the best solution for everyone, the publisher, the advertiser, and last but not least the viewer. So guess what, Brandfame (http://www.brandfame.com/) is an online product placement agency for online videos. It’s still in private-beta.
if you are interested in what the youtube/google video ads look like check out this video:
http://www.45n5.com/permalink/.....video.html
The video ad market seems pretty crowded. A less crowded new advertising market is map mashups. These guys http://www.idelix.com are exploring how to make advertising for maps more compelling, allowing map mashup makers to monetize (enough m’s for you?).
(note: yes, I am affiliated)
I found this site pretty interesting - that let you make your own online video ad either as publisher or advertisers:
http://www.videoadfactory.com
maybe soon we can make our own video adsense for google ads.
I saw Cast.TV at SuperNova, I didn’t know that what they do is to look at the surrounding links and metadata only. I was expecting something bigger enhanced with image and sound processing technologies. We will see how it works but I suspect the surroundings may not be so relevant. But at least, it sounds more feasible than other methods; it should be better to base your company on fully working principles instead of half working ones - even if you have to compromise some relevancy theoretically.
Nice roundup Nick. One other dimension to this puzzle is the actual creative that advertisers are providing, which is a major problem spot today. There’s lots of frustration among broadband video content folks that despite advertiser enthusiasm for shifting some media spending to broadband video, there has not been meaningful new spending on broadband-specific creative. As a result we all see a lot of re-purposed :15 and :30 second spots online which are mainly boring and often irrelevant. In order to really optimize performance, new and appropriate create is going to be essential as well.
Before you can hope to serve a relevant ad, one must first ‘understand’ (and don’t just guess) what the video is about. This problem is not trivial. http://www.Pluggd.com was voted among best in show @ Under The Radar. They are being close-lipped but they easily have the best search solution and by extension, the most optimal ad-servind platform.
So, which is the best? Are you recommending something here?
Or are you just regurgitating info that I could have found on each of these companies websites? What exactly are you trying to say???
I am amazed how, since Google’s purchase, companies are accepting online video site as a way to increase revenue. Google must have the midas touch.
Nobody is talking about the production of video for delivery over of the web - do any of these companies produce video/content or are they just delivery mechanisms. It the missing piece - if you think about it the biggest change that is going to be happening is the ability for any company to communicate their message via video over the web - they are not going to need huge budgets to buy media. We have been producing video for delivery over the web and have been amazed by large production companies inability to produce correctly for the small screen - we have developed a delivery platform http://www.innovateads.com - but it’s the PRODUCTION not the delivery that is going to eventually drive the space
Great roundup. Thanks!
Why is TechCrunch hyping CastTV so much? It has been since October 2006 (9 months!?!?!). Video search is laborious and overrated - social discovery / recommendations from friends is a much better way to find interesting video.
One aspect not mentioned is the video advertising potential for the new generation of TV channel creation sites that allow users to aggregate multiple clips into their own linear channels - sites like One True Media, WorldTV.com, etc.
With multiple clips in a single sit-back-and-watch-setting, it is much easier to solve the problem of where to put the ads. You simply insert them between clips… just like regular TV.
Hi Mark Trefgarne,
I’ve seen couple posts of yours in Techcruch lately and you got me interested.
How can I take part in your beta testing?
Jeremiah,
Isn’t podtech doing ads on their platform. Of the group above I see you guys doing the best job
Surprising not to see metacafe in the list. Even metacafe is doing a lot with video stuffs.
http://www.suggestusability.com
The solution is brilliantly simple and can be summed up in 1 word yet no one realizes the one word that’s missing from this conversation. Pay Attention folks, the script is about to be flipped, because soon everyone is going to get blipd!
Don’t forget Brightcove (www.brightcove.com). Pre-roll advertisements for publishers.
What a glorious display of shameless self-promotion. The video/media hype is disgusting and shows the “sheep mentality” (eg. me too, me too, me too).
btw, Will Richmond, “create” is a verb, and “creative” is an adjective. You may have been looking for nouns like “creativity” and “creation”. Sorry if English is not you first language, but…
Hi Michael P,
Drop me a line via the contact form on our site… http://www.liverail.com/contact-form
if you select business development as the enquiry type from the drop-down it’ll come straight to me…
M.
Why are you using that js code for links on pictures? It even doesn’t work in all browsers…
Have always found it astounding that most video technosites, i.e., unicast & P2P, merely provide the means to broad or narrow cast, with afterthought streaming revenue models of PPV, or pre & post roll, and interstitial, wherein they do NOT own their own content [with few exceptions re ancient public domain largely poor materials quality b&w]. Why settle for 50%, or less, of the ad take vs. 100%? There are still film library bargains to be had.
I remember, back in the early 80s, when Ted Turner was laughed at for presumably overpaying — $15 million — for all of the North American rights to the 1929 thru 1955 RKO Library, 742 titles in total [706 still copyrighted for 95 yrs from first studio sale offer] with only 24 produced in color, and later 86 titles colorized. Still later, Ted bartered the non-North & South American rights to the colorized versions in exchange for all South American rights for all 742 titles. The RKO deal was a bargain, i.e., CITIZEN KANE, BRINGING UP BABY, GUNGA DIN, KING KONG, THE INFORMER, SHE WORE A YELLOW RIBBON, THE CAT PEOPLE, THE THING FROM ANOTHER WORLD, Fred Astaire musicals, et al.
Saying that, as an online broadcaster, if one equates the current valuation of an average small to midsize TV station, you are looking at 13.5x EBITDA as an exit strategy. Much rather own all the content and keep 100% of the ad revenue than run the content consignment shop/flea market that most webcasters are doing, subject to the content owners’ renegotiations and contract cancellations.
Right now I know of one large content owner of long form color movies who just canceled his almost 2 yr old contract to provide his 3,000+ titles to a well known webcaster. They should have bought the library when offered, the jerks. Too much MIT and not enough Corporate Finance and Accounting 101!
zzzzzz - like the other stories on Techcrunch
One of the companies whom I am dealing with for video software infrastructure, CastMetrix (http://www.castmetrix.com) also has ad insertion platform.
But I believe, text ads will be main source of income for video sites for atleast 2 years till there are enough number of advertisers who can pay for video ad and viewers should not find it annoying or else they will simply close the site.
@ Ming
Yes we do do ads, but the above list that Techcrunch has put together is alluding to ‘dynamic’ advertising, some of which will be algorithmically created and controlled.
Another aspect to this is that the media itself is a storefront. At GlooMedia (www.gloomedia.com and our alpha site http://www.glootv.com) we are enabling media companies, advertisers, and our affiliate partners to drive more value from the products AND services seen, heard, implied, and referred to in TV shows, movies, magazine articles, etc.
Convergence is enabling the consumer to have more power and ability to see products in their context of use (sports programming, home improvement, the online video delivery world, etc. etc.) and to then find the products, learn more, and buy what they have seen.
Exciting times!
I know also http://www.zooppa.com for social advertising: never heard of it?
yes, I’ve been on ZOOPPA several times. To me it seems like the most innovative model for video ads. All these other models described above sound “old fashion”
Hey Streaming VC,
We have started a business (currently in stealth mode) that has just he kind of strategic model you describe. We have targeted large libraries (1,000’s of titles) of premium videos in an attractive niche that are not presently accessible online. Many of them can be acquired outright or licensed at relative bargain prices. PPV will be the primary revenue stream, but ad/sponsor revenues will also be a major source of income due to the demographics of the audience. Interested?
Rob and Streaming VC: If you can work out your deal give me a call. Linear TV with ads inserted is the only demonstrated way to make money on video.
Please check out http://www.adotube.com we have inVideo Opt-In ads in a variety of formats.
Our ads are very easy on user experience, and do not redirect away from the video. We also target advertisement demographically and have statistical optimization techniques to increase CPM for our Publishers.
We are in the process of selecting Publishers for our beta solution and finding partners for content.
We are also sponsoring Clickz Online Video Advertising Solution conference.
http://www.clickzevents.com/video/ny/adotube.html
Please take a look.
Good roundup as well… suprised you left out Digitalsmiths, though. Seems they have more partnerships than ones mentioned above, and have been in the biz longer. I believe Will did a blog on them a few weeks ago. I like some of the competitors’ ad-types, though, and not sure how Digitalsmiths accomodates multiple formats. I saw something they are doing with NBC recently.
Nick says there are only a couple problems in this space. There are about 10 huge hurdles. He never mentions 3rd party ad serving, creative, tracking, measurement, traditional agencies structural limitations, lack of technical standards, lack of creative standards, etc.
Also, he talks about pre-roll/post-roll, but doesn’t mention one company that does pre roll or post roll. All of the companies listed are either video search engines or performance-based ad networks (showing banners or tickers in user-generated content). He didn’t even mention the companies that are really working on pre/post roll - doubleclick, atlas, spotxchange, broadband enterprises, tremor, etc.
I really don’t think videos are great place for direct response ads. Even if you have all of the context in the world, it doesn’t mean it’s going to generate more sales. That’s obviously just an opinion.
Personally, we’re focused on professional, semi-professional or heavily monitored user-generated content and we’re working on getting the traditional agencies to sponsor those videos. we’ll beat any CPM that Scan Scout or any of the other performance-based networks can produce. That said, i think there’s room for lots of players and solutions. Performance-based is good for user-generated content. Brand marketing is good for professional content.
OK, we own a lot of content, e.g., thousands of feature films. Open to an all content outright sale [cash, or cash & stock], and/or a JV wherein we supply the content as our contribution, partner supplies all else, i.e., cost of encoding OF ALL CONTENT to create a FREE streaming channel WITH ALL CONTENT [not a beta with just a sample or cherry pick of titles to prove their business model], web site creation, bandwidth, sale of pre roll and/or interstitial ads, e.g., 12 x 15 sec. per hr. Territories would be unrestricted, worldwide.
Those knowledgeable in the industry have appraised our library in excess of a US$50 million all cash valuation.
If Streaming VC, above, is correct re valuation, we could be looking at [by way of an example] 24 spots per 2 hr. movie x $25 CPM = $0.60 gross ad revenue per full length movie view - $0.30 for all overhead = $0.30 per view EBITDA x 13.5 valuation = $4.05 per view x 10 million total views per annum = $40.5 million value for a streaming site. This does not include other ad forms, e.g., static, nor pay per click thru buy [e.g., $ received for purchase of any product, such as an auto at the high end].
sheldon.jacobs@gmail.com
Very helpful, thanks! Look forward to seeing which one will become the ’standard’